Solar panel choice - advice required

[Naptown]

Well its sad to say even our american solar contractors are switching to the dark side of cheap PV.
Stellar Energy bid a project to supply Sharp PV. After the bid was placed. The sharp PV was swapped out for the cheaper less expensive yingli. The claim was that sharp couldn't meet the demand.

Sunpower I guess is keeping prestige. They use a PV panel other than sunpowers own panel. SunPower chose to use Italian PV panel Serengeti.Only for warranty purposes though as it isn't a top of the line high efficient panel.

I don't see american manufactured PV panel companies lasting another 5 years in this highly competitive market, unless finding means and methods of reducing cost up 40% in the next 5 years. Once the government tax credits ar eno longer an option. Companies will be forced to lower cost or the supply will stock pile. Union labor on the manufactured end is hurting costs. Solyndra beyond having a crap product used union labor to build the company.

I know from solar construction, Solar isn't as profitable as it was. Gross margins that use to be in the high 12~15%, are now in the low 2% to 5% gross margins.

Consumers are forcing the prices to go down.

Actually competition among module makers and contractors has driven the price down. The consumer has nothing to do with it.
And the gross margins as above where the bosses coffee is a hard cost on a commercial job may apply. But if gross margin on a residential job was only 2-5% you wouldn't be in business more than 6 months.

[russ]

I really am curious how the consumers force the price down? More solar PV is going in then ever before.

Vinnie said PV tech - not management. We can't expect him to know margins outside of gossip overheard.

[vinniethePVtech]

Vinnie said PV tech - not management. We can't expect him to know margins outside of gossip overheard.

Most construction managers are technicians. Which have both hands on experience and diversification when understanding print details and logistics. The margins are truthful contractors make about as good of profit margins as grocery stores do right now.

It is consumers driving down the cost of PV. Chinese PV sells out faster than European, Japanese, us or Canadian PV. Customers just want a wattage fix, most customers don't care who the supplier is as long as it's cheap and professes a warranty. In that sense it is customer controlled and the Chinese are supplying that demand for customer costs.

[Naptown]

Most construction managers are technicians. Which have both hands on experience and diversification when understanding print details and logistics. The margins are truthful contractors make about as good of profit margins as grocery stores do right now.

It is consumers driving down the cost of PV. Chinese PV sells out faster than European, Japanese, us or Canadian PV. Customers just want a wattage fix, most customers don't care who the supplier is as long as it's cheap and professes a warranty. In that sense it is customer controlled and the Chinese are supplying that demand for customer costs.

So a customer wants a less costly Chinese module as opposed to an expensive Sanyo or Sunpower. How does that effect my GP margin. I fix that at what I want. Yes the project will cost the consumer less but We need to make a certain % of Gross profit to stay in business. Yes the market is being controlled by demand. Meaning there is a higher demand for more cost effective products. We sell what there is a demand for plain and simple. And what people want is a cost effective solution that has a reasonable payback or rate of return.

[Sunking]

We need to make a certain % of Gross profit to stay in business. Yes the market is being controlled by demand.

How dare you say profit? Have you not heard the POTUS has declared war against Biz, and no profits are allowed. If you dare make a profit, we want to take it in the form of higher TAXES. You have no right to make money. I am sending your name to Micheal Moore so he can march in front of your house protesting against Capitalism. The poor SOB only made $50M with his film against Capitalist. Says we all need to be like Cuba.

[Naptown]

How dare you say profit? Have you not heard the POTUS has declared war against Biz, and no profits are allowed. If you dare make a profit, we want to take it in the form of higher TAXES. You have no right to make money.

Actually we take a loss on every contract. This is a labor of love not a capitalistic endeavor! down with profit who needs it! Profit is for the bourgeoisie. I live on organic sticks and dirt. My needs are few. A few sticks I can gather from the virgin Forest for warmth, whatever food I can gather or catch with my bare hands is enough for me.



























I really like the new Lexus Hybrid though

[vinniethePVtech]

So a customer wants a less costly Chinese module as opposed to an expensive Sanyo or Sunpower. How does that effect my GP margin. I fix that at what I want. Yes the project will cost the consumer less but We need to make a certain % of Gross profit to stay in business. Yes the market is being controlled by demand. Meaning there is a higher demand for more cost effective products. We sell what there is a demand for plain and simple. And what people want is a cost effective solution that has a reasonable payback or rate of return.

We are in what is called a buyers market right now, its not a sellers market. If it was a sellers market we wouldn't see companies like evergreen solar go bankrupt. Recessions cause buyers markets, mostly because the cost advantage of labor and material can be manipulated to the buyers cost advantage.
The industry has a standard on price per watt.
Typical commercial projects are $6.50 per watt
Typical residential jobs are $4.50 per watt
the $2.00 price difference is close to accurate from project costs that no matter what cannot be changed or manipulated.

Buyers want the magic WATTS of paying $3.50 per watt roughly. Inflation doesn't allow that to happen

Commercial is obviously more expensive because of the cost of labor, magnitude of industrial equipment that needs to be installed and the cost of bonding and general liability insurance. Commercial jobs because of size typically need $10 million in insurance coverage. Residential needs a minimum of $1million in coverage however a $2million policy is more advantageous and it only cost $25 to $30 more than the 1million policy.

So no matter what those variables don't change. Consumers however are manipulating those variables forcing contractors to bid at lowest levels recorded in the last 25 years.

Diversification of manufactured products and distribution is all that helps companies in a buyers market. It doesn't help sunpower to have the most efficient product on the market and sell it at a high price. There isn't diversification and in most cases if the BUYER wants per watt a bargain they will go with another contractor obviously.

Instead of going through the contractor as a middle man for products the buyer deals directly with brick and mortar warehouses to cut the contractor out and save 10% in cost. As an example Sunpower doesn't allow you as a buyer to buy panels direct, you have to buy from an authorized dealer in order to purchase the product. Again no diversification this hurts sunpower because the distribution couldn't be sold.

Buyers on the residential aspect are controlling the price per watt. With unemployment at its highest levels any home owner can pick an electrician or builder off of the corner. I call this soliciting corner dwelling. So now unemployed electricians make under the table money at half the labor rate any contractor can do the work for.

Before the economy went sour I was bidding lucratively at $76 per hour, now that buyers are taking control I now bid at $38 an hour. That is half the rate, and if I go any lower I might as well file bankruptcy because the general liability insurance and company cost become more than my cost of living.

Cheaper PV runs quality contractors that sell quality products and manufacturers out of business, because buyers want the quick fix and want the lowest bid per watt, thats what it boils down too.

[s.xavier]

We are in what is called a buyers market right now, its not a sellers market. If it was a sellers market we wouldn't see companies like evergreen solar go bankrupt. Recessions cause buyers markets, mostly because the cost advantage of labor and material can be manipulated to the buyers cost advantage.
The industry has a standard on price per watt.

Vinnie you're absolutely right... Business will and should never be easy, it comes down to management and ownership to redefine their strategy so that the organization can sustain continual success.. Personally I think it is the number one reason why a lot of small businesses fail.

Business is tough but you can do it if you're committed to growing your business and stay nimble in a crazy a wacky environment

[vinniethePVtech]

Http://www.greentechmedia.com/articles/read/suntech-and-Other-Solar-Stocks-at-Historic-Low/